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Nepra allows KESC to raise tariff by Rs1.66

In a notification issued on Friday, the National Electric Power Regulatory Authority (Nepra) increased the power tariff of the Karachi Electric Supply Company (KESC) by Rs1.66 per unit under the monthly fuel adjustment mechanism. Previously, the electricity tariff had been increased by Rs1.15 per unit in April and Rs0.51 per unit in May.

Regarding the variation in the fuel component of power purchase cost, the KESC said the main reason was the increase in the energy transfer charge (fuel cost per kWh) of electric power purchased from the National Transmission and Dispatch Company (NTDC). The KESC further revealed that it had purchased around 81 percent of its total power purchases from the NTDC, whichincreased its price from Rs9.552/kWh in March to Rs9.667/kWh in April.

In view of the variation in the fuel cost of KESC’s own generation, the rate of furnace oil consumed by the KESC had increased from Rs71,843.20 per metric ton in March, i.e. reference month, to Rs72,650.67 per metric ton in April. The KESC generated around 198 GWh on account of furnace oil in April against 105 GWh generated during the reference month i.e. March. Since the fuel cost variation is worked out both on account of cost and mix, this increase in generation also contributes towards the variation.

As regards to the variation in the fuel component of power purchase cost, the KESC stated the main reason being the decrease in the energy transfer charge (fuel cost per kWh) of the fuel charge adjustment for the electric power purchased from the NTDC in May. The KESC had purchased around 76 percent of its total power purchases from the NTDC in May, when the unit price of electricity had decreased from Rs9.552/kWh in March to Rs8.061/kWh in May.

According to sources the KESC will directly charge the consumers in Karachi with the increase in power tariff. In addition, the consumers will not receive electricity bills in October with the increased power tariff for the electricity consumed in April and in November for the electricity consumed in May. However, the decision to increase the power tariff will not be effective on lifeline consumers who use 50 units in a month. In April, 1.30 billion units of electricity were used and 770.60 million units were used in May.

Our correspondent adds from Karachi: In a statement released on Friday, the KESC said it had signed a memorandum of understanding to setup coal power plants up to 1,000MW with the Bright Eagle Enterprise Group Limited, a Hong Kong-based company sponsored by Chinese and Korean investors. The move, said the utility, was part of its drive to enhance affordable electricity power generation capacity.

Under the memorandum, coal-based power plants from China would be established, commissioned and energised in Karachi on a fast track basis.Syed Naveed Ahmad, executive director of KESC, and Chen Ping, chairman of Bright Eagle Enterprises, signed the memorandum on behalf of their companies in Hong Kong, said the statement.

Bright Eagle Enterprise is also collaborating for conversion of KESC’s 1,260MW Bin Qasim Power Plant-I from residual fuel oil to coal under a joint development agreement. The KESC is also actively pursuing Thar coal reserves-based power generation under a joint development agreement with Oracle Coalfields of the UK and Sindh Carbon Energy signed in June this year to set up a coal mine mouth power plant.